The trend towards smaller and more fuel efficient cars has caused DaimlerChrysler to consider importing Mercedes’ small A and B-class small cars to the US. Mercedes doesn’t sell these cars in the US because of fears it would damage the luxury brand’s exclusivity. Currently, the cheapest sedan is a C230 that begins at just over US$30K, but if the smaller cars were imported they’d have to be much cheaper than this. Mercedes was previously looking at importing the B-class, but the weak dollar made the business case for it unappealing. The German carmaker has also said it’s looking for a partner to develop and manufacture its next generation small cars to help reduce costs.

BMW is also planning to bring its 1-series small car to the US, which will mean the perennial rivals will have yet another segment to fight over.